UK redundancy rate hits highest level since 2021

The UK redundancy rate rose to 4.6 per thousand people in the three months to January 2024, the highest level since 2021, according to Office for National Statistics data reported by Which?¹. Between November 2023 and January 2024 there were around 133,000 redundancies in the UK, compared with 116,000 in the previous three months¹.

The unemployment rate also climbed over the same period, to 3.9% in the three months to January 2024, and is expected to reach 4.5% by the end of the year¹.

Statutory redundancy pay

For employees in England, Scotland and Wales with two or more years' service, statutory redundancy pay is based on length of service, up to a maximum of 20 years, and age¹. Weekly pay for this calculation was capped at £643 for redundancies on or after 6 April 2023, rising to £700 from 6 April 2024, with the maximum statutory redundancy pay capped at £19,290¹.

Source: Which?¹

Statutory minimum notice periods in England, Wales and Scotland are at least one week for between one month and two years' service, a week for each year of employment for those employed between two and 12 years, and 12 weeks for those employed for 12 years or over¹. Where an employer cannot keep an employee on for their notice period, for example if the business is going out of business, the employee is still entitled to compensation for that period¹. Payment in lieu of notice means an employer asks the employee to leave earlier but still pays basic salary for the notice period; unless the contract says otherwise, the monetary equivalent of benefits such as pension contributions is unlikely to be included¹.

Where an employer does not follow the procedures required by employment law and the employee has more than two years' service, the dismissal could be deemed unfair¹. Employers proposing more than 20 redundancies within 90 days must consult trade unions or staff representatives¹. From April 2024, a new law will give greater protection to pregnant women and new parents, extending priority status for suitable alternative vacancies to pregnant employees and those who have recently returned from maternity, adoption or shared parental leave¹.

Before issuing a claim, the conciliation service Acas must be contacted to commence Early Conciliation¹.

Why it matters for households

A higher redundancy rate means more people are leaving work involuntarily, and the figures cover the three months to January 2024, so they describe a period that has already passed¹. For anyone affected, the practical questions are about money already accrued: whether two years' service has been completed, since that usually determines entitlement to statutory redundancy pay, and how the age-banded formula and the weekly pay cap apply to their circumstances¹. The cap on weekly pay rises from £643 to £700 on 6 April 2024, so the date a redundancy takes effect can change the calculation¹. Notice periods and any payment in lieu of notice affect when income stops, and benefits such as New Style Jobseeker's Allowance, New Style Employment and Support Allowance, Universal Credit and Pension Credit may be available depending on circumstances, with eligibility and amounts varying¹. The life events hub covers related changes in circumstances.

What happens next

The weekly pay cap used in statutory redundancy calculations rises to £700 from 6 April 2024¹. From April 2024, the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 extends priority status for suitable alternative vacancies to pregnant employees and those recently returned from maternity, adoption or shared parental leave¹. The unemployment rate is expected to hit 4.5% by the end of the year¹.